Makes sense to me.
If RHI sells a book for $20, they remain competitive with B&N, Borders, etc. and make a very nice profit.
However, selling the e-book takes money from the brick and mortar store, which will then purchase less volume, decreasing the publishers revenue from physical products. Additionally, it harms the ability for a brick and mortar store to function, possibly driving them out of business. Boarders is on the brink of financial ruin, last I checked they owed something like 90% of their equity to creditors.
If the iPad really gets people to read, it could be a godsend to brick and mortar stores, and the book publishing industry as a whole. However, if it doesn't get more people to start reading, but only dilutes the market even more, then it has the ability to destroy the market, where the only stores left selling books are Wal*Mart, Apple, and mayyyyybe Barnes and Noble.
Worse still, Wal*Mart sells their books very near cost. If Barnes and Noble and Borders fold, the worst case scenario just got worse still, where you are only left with Wal*Mart and Apple as booksellers.
If that is the case, and Wal*Mart sells their $20 books for $10, than the book publishers must lower their prices at the Apple store, or raise Wal*Mart's prices. Raise them too much, and Wal*Mart will carry less.
In this very pessimistic world, you you have a war where the publishers end up fighting for lower prices, and ultimately end up as the only distributor for their product. (This is similar to how all of the major record stores are slowly folding up, and Wal*Mart is becoming the only place to purchase music, aside from iTunes/Amazon.)
RHI chose to sit this one out, and I believe, in the interests of helping brick and mortar book stores, that it is the correct decision.
N.B.: When I say Wal*Mart, I mean walmart-esque big-box all-in-one stores, including best buy or target. What I do not mean are small mom and pop stores, or specialized stores that carry less trafficked or marginalized items.
So if I understand this right...
Apple is giving the book publishers exactly what the music labels have been begging for all these years, right?
The music people haven't gotten it, but the book people have, and the book people are afraid of it?
Are books that much different from music here? Or is one of these 2 industries being stupid?
Well, first, books are not stolen from the publishers at the same rate that music was pirated. 2nd of all, if books are stolen, it is the retail store's problem, not the publishers (99.999% of the time). Lastly, the music industry HATES iTunes. So even if they are 100% similar businesses, the book industry is right to fear it, just on principle.
